"This is the next avalanche that's coming towards music venues."
(Photo by Jake Lewis)
The UK nightlife scene just can't catch a break. Last month brought some good news, or at least an absence of bad news, when it emerged that the number of music venues in London had remained stable after ten years of decline. Now, it looks like a large number of those venues will face closure if the government goes ahead with a massive increase in property taxes.
In April of this year, every commercial property in the UK will have its business rates revalued. It'll be the first time that rates (essentially the business equivalent of council tax) have changed for seven years. The government works out rates based on property values, so, in theory, they can go up or down. In reality, steep increases in property values over the last few years mean many music venues and nightclubs will be facing a huge increase in running costs.
"It's a very big deal," says Mark Davyd, chief executive at the Music Venue Trust. "We would estimate half of all of these venues will be placed in difficulty."
The problem is set to be most pronounced in London, where property values have spiralled. The Music Venue Trust recently published a map of "grassroots music venues" in the capital. Analysis by VICE suggests that these venues are facing an average rise of 45 percent in their "rateable value" – the figure which determines how much they pay in business rates.
Paul Easton is national head of business rates at property consultant Lambert Smith Hampton. He explains what the changes mean: "There have been many examples of music venues where rateable values, and therefore rates bills, are going to go up significantly," he says. "This is the first time in seven years that all business properties have been reassessed, and there are wide variations depending on location and types of property. Some are going down significantly, but others, including music venues, are seeing some very big increases."
"They don't have the money."
Venues where rateable values are set to rise include fabric, The Old Blue Last, Ronnie Scott's, The Underworld and Windmill Brixton. According to the government's current estimates, the Macbeth in Hoxton is facing a whopping rise of nearly 800 percent. The rates rise will affect all commercial businesses, meaning it's not just gig venues but clubs, bars and pubs which are all in danger – facing extra costs amounting to tens of thousands of pounds. Davyd describes this as "the next avalanche that's coming towards music venues".
"There's no point imagining they will just absorb 45 percent increases," he says. "They don't have the money."
Many venues have been here before. The 100 Club on London's Oxford Street, one of the world's longest running independent venues, faced closure in 2010 when business rates were last revalued. The club was saved after a high-profile campaign backed by the likes of Paul McCartney and a subsequent partnership with Converse. Seven years later, it's now facing another 50 percent rates hike.
While rises are expected to be most severe in London, many other venues across the country will also be affected. Rachel Smillie is director at The Glad Cafe, a non-profit arts centre and music venue which opened in Glasgow in 2012. Smillie tells me the cafe is facing a three-fold rise in its rates, an increase she says "effectively puts us out of business". She knows of many other Glasgow venues in a similar situation. "I think there must be a lot of licensed premises which are very alarmed at the moment," she says.
Even for venues which can withstand such a substantial rise in running costs, there will be serious implications for the way these businesses are run. Stacey Thomas runs The Lexington, a gig venue in Islington. Having just spent two years battling a large rise in rent, Thomas says she's now looking at a rates increase of 200 percent. "It means we can't take as many risks with grassroots artists," she says. "We can't say, 'You sound great, let's give you a go,' which is detrimental to grassroots music and the community as a whole."
"They will all turn into pizza restaurants. It's as simple as that."
With the planned rates rise affecting all commercial properties, including shops and restaurants, many other businesses could also find themselves in trouble. Some will no doubt question why music venues should be the exception. Davyd argues that many councils already offer exemptions to other cultural venues: "We have a big gap between the way music venues are treated and the way we treat pretty much all other parts of culture." Davyd says many councils already offer exemptions to theatres and arts centres. "We're not asking for anything special," he says.
Alan Miller, chairman at the Night Time Industries Association, says rates rises are just the latest expense to be heaped on licensed venues, which are increasingly called upon to pay for increased security measures and "late night levies" imposed by councils. Miller describes a trend in which nighttime venues are seen not as cultural assets, but as a problem that needs to be tackled. A rise in business rates is just the latest blow. "People recognise that they are part of a community, they are there commercially and are trying to make money," he says. "But a 40 percent hike? Things like that will put people out of business."
So what happens now? In a recent report on music venues in the capital, the Greater London Authority acknowledged that the rates rise "could put a number of grassroots music venues at risk". It called on the government to consider offering music venues an exemption from rates and for local authorities to introduce urgent relief. A further report will soon be published to make the case for such measures. For now, venues just have to wait and see.
In the absence of urgent measures to tackle the impact of rates rises, the outlook does not look good. Some venues may be able to escape the rates rise by seeking charity status. Some will be forced to raise entry and drinks prices to help meet the extra cost. Others may need to take more radical action. Davyd offers up a bleak possibility. "These spaces aren't making huge profits," he says. "They will all turn into pizza restaurants. It's as simple as that."
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